April 21, 2000

By Gene Hall
Publisher

When I filled up my gasoline tank yesterday, I congratulated myself at finding a pump that would dispense regular unleaded for less than $1.40 per gallon. Of course, chances are pretty good that, by the time you read this, that price will have been bumped by at least a nickel per gallon.

Almost everyone I know is starting to get a little tense over the rapid increase in the price of petroleum products. These price jumps are squeezing farmers during planting, making public transport more expensive and distorting travel budgets all over the land.

It is a lesson in supply and demand that any elementary school child could understand. The oil ministers of the cartel know as the Oil and Petroleum Exporting Countries (OPEC) look after the ocean of oil that lies beneath their nations and surrounding waters, they have the power to curtail production and manipulate the supply, and therefore, the price. Looking out for their own interests, they did so.

Sadly, our own energy policy here in the U.S. is so woefully lacking in foresight that it was inevitable. Oil, at least that in the ground, is not really scarce, but the cheap and readily available foreign oil tempted us to do some irresponsible things. To put it simply, we asked for it.

We sat back and allowed our government to do virtually everything it could think of to curtail domestic discovery and drilling. We did it by imposing regulations that made oil too expensive to locate and recover. In the eighties, when prices dropped to the point that many wells could not produce enough to pay the pumping costs, those wells had to be capped. By law and regulation, they were capped so darned well that it is now cost prohibitive to open them, even though the price is once again favorable. We did it with punitive levels of taxation. In the process, we just about killed off the domestic oil exploration industry. You want to drill for oil? There are lots of rigs available. Cheap.

Well, if you like the opening pages of this little story, you’ll love chapter two. It concerns something even more essential than oil—food.

Stop me if this sounds familiar, but we are in the process of forcing multi-generation farm families from the land. We are doing it with an old familiar blueprint. We have regulations that squeeze the already slim profit right out of agriculture, lackadaisical pursuit of overseas markets, and confiscatory taxation. The only thing keeping many farm families on the land is financial assistance, passed by a generous Congress. How long can farm families depend on such assistance? Our national food policy looks a lot like our energy policy.

Let’s not worry, though. We can always import our food. There is lots of food in other countries and the price is right. Never mind that much of it will not comply with the strict environmental and safety regulations we impose on our own farmers.

We should not worry that our food supply will be in the hands of policy makers we cannot influence. Imported food will always be readily available and cheap. Do you doubt it? Let’s go ahead and get "hooked" on cheap and plentiful food from Australia, Europe and the Far East.

True, the cheap price of foreign oil allowed U.S. policy makers to cave in to pressure and do some bone-headed things on the regulatory front. Argue if you want as to whether it’s the right thing, but there is no question that we are paying for it now.

Surely that will not happen with food, though. The price will always be reasonable. There’s no need to protect our own ability to produce food. No government will ever withhold food from America for political reasons. Right.